Before moving on to the topic of how to mine bitcoin online in India, let us first look at the basics of cryptocurrency.
Cryptocurrency: Cryptocurrency is online money and it is in digital format. It is used as the medium of exchange in the online world. It is not governed or issued by any central authority. Eg. Bitcoin (first decentralized Cryptocurrency).
What is Bitcoin Mining?
Bitcoin mining is the process by how the new bitcoins are entered into circulation? but it is an important component of the maintenance and development of blockchain ledgers. This is done using sophisticated computers that solve the most complex computational math problems.
Note: These are the three major concepts of blockchain to understand a bitcoin mining
Public distributed ledger:
A distributed ledger is a record of all transactions maintained on a blockchain network around the world. On the network, the verification of transactions is done by Bitcoin users.
Blockchain prevents unauthorized access by using a hash function called SHA-256 to ensure that blocks are kept secure. They are digitally signed. Their hash value, once created, cannot be changed. SHA-256 takes the input string of any size. It returns a standard 256-bit output. You can not get the entire input reverse from the output (which you created) since it is a one way function
Proof of work:
In blockchain mining, miners verify transactions by solving a difficult math puzzle known as proof of work. For doing that, the central objective of the miner is to find the nonce value and the math puzzle that the miners have to solve to create a hash less than the target explained by the network for a particular block.
How to mine bitcoin?
The Process of Mining Bitcoins
Bitcoin mining is the process that is used to receive a reward for solving a math puzzle.
Need specialized computers to solve the math puzzle in a blockchain.
It is essential to keep the network running.
Mining Bitcoins takes a lot of computer power, and the lucky one who checks a block would have solved a math problem before the rest of the network will earn a bitcoin.
In the network, as mentioned, users, known as miners, try to solve a math puzzle. The puzzle is solved by converting a nonce that produces a hash value less than a predefined position, known as the target. A miner verifies a transaction by solving a puzzle and adds a block to the blockchain when it is solved and verified by other users. By today, bitcoin miners who solve a puzzle receive a reward of 12.5 bitcoins.
Once a block is added to the blockchain, the bitcoins associated with the transactions can be spent and transferred from one account to another.
To create a hash, bitcoin miners use the SHA-256 hashing algorithm and explains the hash value. If it is less than the defined condition (target), the puzzle is considered to be solved. Otherwise, they modify the nonce value and repeat the SHA-256 hashing function to re-create the hash value, and they do this until they get a hash value lower than the target.
The solution to the puzzle of mine Bitcoin is to create a new block with a size of 1MB. Bitcoin transactions waiting to be confirmed are then collected from a memory. Bitcoin miners have the opportunity to prioritize Bitcoin users who are willing to pay higher fees on their transaction module.
This new module includes something called a “currency exchange”. Bitcoin miners thus collect a reward of 6.25 PTC for their efforts and the transaction fee of each fee added to their block.
Points to remember
#1 You need a GPU (graphics processing unit) or application specific integrated circuit (ASIC) to set up the mining rig.
#2 Through mining, you can earn cryptocurrency without investing money in it.
#3 Bitcoin miners receive Bitcoin as a reward for completing “blocks” of verified transactions, added to the blockchain.
#4 Mining rewards are first given to the miner who finds a solution to a complex hashing puzzle, and the possibility of the participant finding the solution is related to the portion of the total mining power in the network.
#5 We can also buy Cryptocurrency by using a real-time money
The Bitcoin reward that miners receive is an incentive to motivate people to help with the primary purpose of mining: to legalize and monitor transactions and to ensure their validity. Because these responsibilities extend to many users around the world, Bitcoin is a “decentralized” cryptocurrency or one that does not trust any central authority, such as the central bank or government, to oversee its regulation.